Over 160 years ago, soon after California Gold Rush (1848-1855) at Sutter’s Mill in Coloma, California, Henry Wells and William G. Fargo,on March 18, 1852, decided to organized Wells, Fargo ; Company, in San Francisco and Sacramento, a joint-stock association with an initial capitalization of $300,000, to provide express and banking services to California including the operation of stagecoach lines, the transportation and safekeeping of gold and the delivery of the U.S. mail.Wells Fargo is headquarter in San Francisco, but has major “hubquarters” in other cities of U.S. ( wellsfargohistory.com). Business Structure:
“Wells Fargo ; Company is a corporation organized under the laws of Delaware and a financial holding company and a bank holding company registered under the Bank Holding Company Act of 1956, as amended”, which provides retail, commercial, and corporate banking services. The company’s Community Banking segment offers deposits, such as checking accounts, savings deposits,…..This segment is also provides equipment leases, real estate and other commercial financing, small business administration financing. Wells Fargo Wholesale Banking segment offers commercial loans, equipment leasing, investment management, construction loans, land acquisition, development loans, and…. The bank’s Wealth, Brokerage, and Retirement segment offers financial advisory, wealth management, brokerage, retirement, trust, and reinsurance services financial advisory, wealth management, brokerage, retirement, trust, and reinsurance services.( investing.businessweek.com).
In overall, Wells Fargo and Company (NYSE: WFC) is a multinational diversified financial services company providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores and more than 12,000 ATMs and the Internet, across North America and internationally. Wells Fargo is ranked as the largest bank by market capitalization (Capitalization Rate = Yearly Income / Total Value), which is at 9.46%, in the United States, and first in market value of stock among the U.S. banks. Among all financial services companies, Wells Fargo is ranked first in market value in the United States, and third in the world, as of December 31, 2012(Quarterly Fact Sheet of Wells Fargo). Wells Fargo and Company is the 4th largest bank by assets ($ 1.4 trillion) after: Bank of America Corporation with assets of nearly $2.28 trillion. JPMorgan Chase with assets of nearly $2.19 trillion. Citigroup with assets of nearly $1.94 trillion. Stock Price:
Early Friday (4/ 12/ 2013):
Wells Fargo grew profits 22% to $5.17 billion.
Per share earnings, including preferred dividend payments, totaled 92 cents, up from 75 cents. The bank had 2.6% decline in income from its mortgage business and drop in net interest margin. In Friday afternoon (4/ 12/ 2013):
The bank shares fell 1.7% to $36.86 in Friday afternoon trading. However, shares look vulnerable to further downside. First Board of Directors:
The early board of directors consisted Henry Wells, William G. Fargo, Johnston Livingston, Elijah P. Williams, Edwin B. Morgan, James McKay, Alpheus Reynolds, Alexander M.C. Smith and Henry D. Rice. Financier Edwin B. Morgan of Aurora, New York, was appointed Wells Fargo’s first president. Present Board of Directors:
Chairman, President and CEO: John G. Stumpf. John Stumpf became Chairman for Wells Fargo ; Company in January 2010. He was named Chief Executive Officer in June 2007, elected to Wells Fargo’s Board of Directors in June 2006, and has been President since August 2005. In 1982, John Stumpf joined the former Norwest Corporation (predecessor of Wells Fargo) as a senior vice president in the loan administration department. Then he became chief credit officer for Norwest Bank, N.A. Minneapolis. According to wellsfargo.com, during this period Stumpf led Norwest’s acquisition of 30 Texas banks with total assets of more than $13 billion. In 1998, with the merger of Norwest Corporation and Wells Fargo ; Company, he became head of the Southwestern Banking Group (Arizona, New Mexico and Texas). In 2000, Stumpf became head of the new Western Banking Group (Arizona, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming). In this period he led the integration of Wells Fargo’s acquisition of the $23 billion First Security Corporation, based in Salt Lake City. In May 2002, he was named Group EVP of Community Banking. In 2008 by purchasing Wachovia he led the
one of the largest merger in the U.S. banking history. John Stumpf earned his bachelor’s degree in finance from St. Cloud State University, St. Cloud, Minnesota and his MBA with an emphasis in finance from the University of Minnesota. (wellsfargo.com) Chief Financial Officer (CFO): Mr. Timothy J. Sloan, has been the Chief Financial Officer and Senior Executive Vice President of Wells Fargo ; Company since February 8, 2011. According to an article in www.wellsfargo.com,” Sloan served as the Chief Administrative Officer of Wells Fargo ; Company from September 3, 2010 to February 8, 2011. Mr. Sloan served as the Head of Commercial Banking Real Estate ; Specialized Financial Services at Wells Fargo ; Company. Mr. Sloan served as Head of Specialized Financial Services for Wells Fargo ; Company. He served as an Executive Vice President of Wholesale Banking with Wells Fargo Bank, National Association, from August 2003 to September 2010. Mr. Sloan joined Wells Fargo in 1987.” Mr. Timothy J. Sloan earned his Bachelor’s Degree in Economics and History and an M.B.A. in Finance and Accounting from the University of Michigan. Chief Information Officer (CIO): Kevin Rhein has been the Senior Executive Vice President Chief Information Officer of Wells Fargo and company since 2008. According to wellsfargo.com, Rhein is responsible for “core technology activities including computing services, connectivity services, application development, information security, business continuity planning, enterprise business services and information management, enterprise architecture, monitoring, change control and problem management. As head of the company’s Operations Group, he is responsible for check processing, statement processing, ATM operations, ACH and wires, fraud disputes, cash vaults, lockbox, safe-deposit processing, armored logistics, accounting support for retail stores and deposit document retention” Kevin Rhein earned his Bachelor’s degree in Psychology from the University of Illinois, and an MBA from the University of Chicago. According to wellsfargo.com other current major officers of Wells Fargo are: Patricia R. Callahan, Chief Administrative Officer, Mike Heid, Executive Vice President, Michael J. Loughlin, Chief Risk Officer, David Hoyt head of the Wholesale Banking Group, and Carrie Tolstedt is responsible for retail, small business and business banking at Wells Fargo. Shareholders:
According to forbes.com, “As of 2012, Berkshire Hathaway was the single
largest shareholder, having a stake of 411 million shares. Contains 5,266,300,000 in outstanding stock.” Vanguard Group, Inc. 212,797,298 shares, State Street Corporation 205,749,010 shares, FMR LLC 192,237,919 shares, Capital World Investors 157,882,074 shares, BlackRock Institutional Trust Company, N.A 130,016,259 shares, Wellington Management Company, LLP 113,152,549 shares, JP Morgan Chase & Company 98,225,519 shares, Dodge & Cox Inc. 76,436,311 shares, Northern Trust Corporation 73,468,045 shares. Wells Fargo customers:
Wells Fargo’s overall objective in recent years has been to “have the most functionality available to the most customers possible.” (Scott Babut and Mark Dempster, University of Michigan). The bank has continued to provide “The bank had continued to provide personal, responsive service by connecting its customers to essential financial services 24 hours a day – by ATM, phone, personal computer or through a growing network of traditional and supermarket branches” (University of Michigan). As a result, Wells Fargo bank has turned to the one of the largest and busiest in the U.S. providing banking services to more than 10 million households in the 10 Western states. (sites.google.com). According to Wells Fargo Quarterly Fact Sheet Statistics, one in three households the United States does business with Wells Fargo and Company because if increasing new electronic banking channels. Electronic banking channels have enabled customers to perform more transaction without need of going to the bank and interacting with banking personnel. According wellsfargo.com, “The average branch transaction cost over $1.10. The same transaction done by phone cost approximately $0.40 and the cost dropped to $0.03 if the transaction was done over the Internet.” Hence, in order to encourage customers to use these less expensive, easy and convenient services, Wells Fargo Bank offers online banking 24 hours a day and seven days a week. “Customers can transact your financial personal or professional business easily from the comfort of your home office or living room chair” (wellsfargo.com)
According to yahoofinace.com in recent years Wells Fargo and company with Market Capitalization 198,027 Mil and Net Income 18,897, has faced a number
of traditional and non-tradition competitors such as: Bank of America: headquartered in San Francisco, has been one of the major competitors of Wells Fargo.. In 1994, they chose to include in their line of products a Web site that enable customers to perform variety of both personal and business banking functions. Market Cap Net Income
133,305 Mil 4,188 Mil
Citibank: Was opened in 1812, is the third largest bank holding company in the United States by 1.865T total assets. Their online services division is among the most successful in the field claiming about 15 million users. Market Cap Net Income
63,709 Mil 5,647 Mil
Security First Network Bank (SFNB):
Security First Network Bank, opened in October 1995, was the first bank to exist entirely on the Internet and amassed more than $40 million in assets in less than two years. Market Cap Net Income
……… 422 Mil
Jack Henry and Associates: is online banking competitor for Wells Fargo, which is offering online banking systems for small financial institutions. Market Cap Net Income
3.90 Mil 43.3 Mil
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Wells Fargo Quarterly Fact Sheet Statistics. Wellsfargo, n.d. Web. 13 Apr. 2013. .